| Kesoram Industries Limited | ||||
| Issuer not cooperating; Rating removed from ‘Watch Developing'; Rating Withdrawn | ||||
| Rating Action | ||||
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| Note: None of the Directors on CRISIL Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||
| 1 crore = 10 million | ||||
| Refer to Annexure for Details of Instruments & Bank Facilities | ||||
| *Issuer did not cooperate; based on best-available information | ||||
| Please note that the rating(s) are based on best available information with the credit rating agency: the entity whose debt is being published via this rating rationale did not provide the requisite information needed to conduct the rating exercise or did not provide the No Default Statements (NDS) for the last three months and is therefore classified as 'non cooperative'. |
Non cooperation by Issuer CRISIL Ratings has been consistently following up with Kesoram Industries Limited (KIL) for obtaining information through letters and emails dated December 1, September 23 and September 21, 2023, among others, apart from telephonic communication. However, the issuer has remained non-cooperative.
The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'issuer not cooperating' as the rating has been arrived at without any interaction with the management and is based on best available, limited or dated information regarding the company. Such non-cooperation by a rated entity may be a result of weakening of its credit risk profile. Ratings with the 'issuer not cooperating' suffix lack a forward-looking component. |
Detailed Rationale Despite repeated attempts to engage with the management of KIL, CRISIL Ratings has not received requisite information on either the financial performance or the strategic intent of the company, which restricts CRISIL Ratings’ ability to take a forward-looking view on the company’s credit quality. The rating action on KIL is consistent with the 'Assessing Information Adequacy Risk' criteria of CRISIL Ratings.
As mentioned in our previous rating rationale dated December 11, 2023, KIL has entered into a Composite Scheme of arrangement with UltraTech Cement Limited (UltraTech; rated ‘CRISIL AAA/Stable/CRISIL A1+’) for the demerger of KIL’s entire cement business undertaking into UltraTech. The debt instruments rated by CRISIL Ratings were also part of cement business undertaking of KIL. However, there was no clarity regarding these debt instruments towards the terms & conditions of transfer to UltraTech. Accordingly, the rating on these debt instruments were placed on ‘watch with developing implications’.
On February 29, 2024, KIL informed via the stock exchanges that it has redeemed the rated NCDs in full by raising funds from other lending institutions. As such, the terms and conditions of these instrument did not change and they were not transferred to UltraTech. Basis this, CRISIL Ratings has removed these instruments from ‘Watch Developing’ and reinstated ‘Stable’ outlook while reaffirming the rating at ‘CRISIL BB+ Issuer Not Cooperating’.
CRISIL Ratings has withdrawn its ratings on the rated instruments, upon receiving independent confirmation of timely and full redemption of all the rated instruments from the debenture trustee. The rating action is in line with CRISIL’s policy of withdrawal of ratings. |
Analytical Approach
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About the Company KIL, part of the BK Birla group of companies, is a diversified conglomerate that manufactures cement and rayon. Cement manufacturing is the primary business of the company. Its cement units in Karnataka and Telangana have aggregate capacity of 10.75 million tonne per annum. After the demise of Mr BK Birla, the company is being managed by Ms Manjushree Khaitan, who is also the chairperson.
In fiscal 2020, the National Company Law Tribunal approved demerger of the tyre business of KIL on November 08, 2019, and the scheme became effective from December 04, 2019, with the appointed date being January 01, 2019. |
Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s) withdrawn
# Payable on a monthly basis & 9.10% for 1-18 months, 11.30% for 19-36 months and 13.10% 37th month onwards until maturity and redemption premium to maintain the overall XIRR of 20.75% *Issuer did not cooperate; based on best-available information |
| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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* - Issuer did not cooperate; based on best-available information
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Criteria Details
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